1031.Exchange INTELLIGENCE NETWORK
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TAX & BASIS

Excess basis

Also called: new-money basis · additional basis

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PLAIN-ENGLISH DEFINITION

Basis attributable to additional investment above the carryover component in replacement property.

What it means in practice.

Depreciation rules distinguish carryover basis from excess basis in certain exchanged property calculations.

Why it matters.

It can affect future depreciation treatment and tax modeling.

Additional notes.

Depreciation rules distinguish carryover basis from excess basis in certain exchanged property calculations.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/publications/p946
CONNECTED LANGUAGE

Related definitions.

Tax & BasisCarryover basisThe general concept that tax basis from the relinquished property carries into the replacement property, with adjustments required by the exchange rules.Tax & BasisDepreciationThe tax deduction framework that allocates the cost or other basis of qualifying property over its recovery period.
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